The popularity of smoking tobacco in the UK has steadily fallen since the 1970s. Greater awareness of the health risks associated with smoking and growing government taxes on tobacco products have contributed to the long-term deterioration of the UK tobacco market.
In 2019, the proportion of UK adults that smoked fell to just 14.1%, from a high of 45% in 1974, according to the Office for National Statistics.
However, the UK continues to have a substantial tobacco industry, with the UK Tobacco Product Wholesaling industry expected to generate revenue of £7.3 billion in 2021-22.
Nevertheless, the shift away from tobacco consumption has accelerated in recent years, as widespread anti-smoking campaigns, including Stoptober, Health Harms and Quit Together, have grown in popularity.
Moreover, the growing popularity of tobacco alternatives, such as e-cigarettes and vapes, has accelerated the decline in demand for tobacco. This has encouraged tobacco wholesalers such as British American Tobacco plc and Phillip Morris International to explore alternative avenues, while also threatening the performance of the Tobacconists industry.
Growing alternative market
Demand for e-cigarettes and vapes has surged over the past decade, as they can be used to support quitting tobacco and as standalone products for those who have never smoked.
There are more smokers of tobacco than users of e-cigarettes and vapes; there were 7.8 million smokers in 2019, compared with 2.7 million users of e-cigarettes and vapes in England. However, the UK e-cigarette and vape market is now valued at over £1 billion per year.
It is one of the fastest growing consumer goods sectors in the country, according to the UK Vaping Industry Association. A growing number of major tobacco producers have increasingly diversified their product portfolios to include other products to protect themselves against dropping demand for tobacco and capitalise on growing demand for alternatives.
Phillip Morris International, owner of the Marlboro cigarette brand and producer of approximately 10% of cigarettes globally, has invested over US$8 billion (£5.9 billion) in smoke-free products since 2008, including the majority acquisition of UK-based inhaler company Vectura in September 2021.
Quitting smoking
E-cigarettes are often marketed at tobacco smokers as a method of quitting and are generally designed to look like traditional cigarettes. While not risk free, some evidence shows that e-cigarettes are significantly less harmful for users than traditional tobacco smoking and are up to twice as effective at helping smokers quit than traditional nicotine replacement at one-fifth of the price.
Research from UCL suggests that e-cigarette usage enables up to 70,000 people to quit smoking per year.
Vapes are popular with both smokers and non-smokers and come in both nicotine and non-nicotine varieties. The popularity of vaping as a method of quitting tobacco smoking has surged due to its reduced health risks and ability to control nicotine dosage, enabling users to reduce nicotine use over time.
A 2019 survey by Public Health England found that over 60% of vape users took up vaping in an effort to quit or reduce tobacco smoking; in 2020, nicotine vaping products were the most popular aid used by smokers trying to quit.
Vapes are also popular among non-smokers, owing to their wide variety of flavours and growing cultural appeal.
Heavy regulation
Government intervention to reduce tobacco consumption has also contributed to the decline of the UK tobacco market.
The United Kingdom has one of the highest tobacco tax rates in Europe, with a duty rate of 16.5% of the retail price plus £244.78 per 1,000 cigarettes, as well as a duty of £271.40 per kilogram for hand-rolling tobacco.
The government also uses other methods to discourage smoking, including stringent labelling rules and a ban on smoking in indoor public spaces, which has been in place since 2007. The government also runs anti-smoking campaigns. Public Health England’s flagship anti-smoking campaign is Stoptober, an annual challenge to quit smoking for 28 days, which has run since 2012.
The 2020 Stoptober campaign resulted in over 960,000 UK smokers making an effort to reduce smoking.
The campaign is based on research that suggests that smokers who are able to stop smoking for 28 days are five times more likely to quit for good. Stoptober campaigns include widespread advertisements and an app for participants.
Stress smoking
The COVID-19 pandemic led to a short-term boost in demand for tobacco. The rate of smoking in the UK rose following the imposition of lockdown measures in March 2020, especially among those aged under 35, according to research by UCL. The rise in smoking during the pandemic has been attributed to increased boredom, stress and anxiety, especially during lockdown periods.
The percentage of those under 35 who smoked rose from 19.8% in March 2020 to 25.2% in June 2020.
The rise in smoking is further evident in government tobacco duty tax receipts.
In 2020-21, UK government receipts from tobacco duties reached a record high of £10 billion.
This is also likely to have been inflated by travel restrictions, which reduced the amount of tobacco and number of cigarettes purchased abroad or for a duty-free price at airports.
The industry’s future
In the future, alternatives to traditional tobacco products are expected to continue to grow in popularity. Phillip Morris International has already committed to switch to only producing smoke-free products by 2030 and focus on heated tobacco products and e-cigarettes.
Large tobacco companies are expected to roll back cigarette production over the next decade. However, the UK cigarette industry is unlikely to disappear altogether bar any major government intervention.
The government aims to reduce adult smoking rates in England to 12% in 2022, as set out in its 2017-2022 Tobacco Control Plan. This is unlikely to be met; however, a new control plan is expected to be released in 2022 with new targets for the future. This is expected to be a part of the government’s long-term plan for England to be smoke-free by 2030, which it defines as a less than 5% smoking rate among adults.
In addition, a review of regulations related to tobacco and related product, including e-cigarettes and nicotine vaping products, was launched in May 2021. This could become the basis for a new wave of government regulation going forward.
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